Benchmarks extend early losses in afternoon session

Indian equity benchmarks extended losses and reached intra-day low levels in the afternoon session on account of selling witnessed in frontline blue chip stocks such as Bharti Airtel, BHEL, HDFC Bank, Sun Pharma and SBI as weak global cues weighed on the investors’ sentiments. Investors remained on the sidelines ahead of F&O expiry on November 28. Power was the top loser on BSE down by nearly 0.73% followed by capital goods and realty both down by around 0.65%. Healthcare and banking stocks also witnessed selling. On stock specific movement, Tata Motors, ONGC and Dr Reddy’s Lab were trading up by over 1%, while, Bharti Airtel, BHEL and SSLT were down by over 1.50% on BSE. Among other stocks, Wockhardt plunged nearly 14% on media reports that the U S Food and Drug Administration (US FDA) issued an import alert for the drug maker's Chikalthana facility at Aurangabad. Cairn India was trading lower by 2% on BSE after the company announced that it will spend up to Rs 5,725 crore on the shares buyback at a price not more than Rs 335 per share.

On Global front, Asian markets were trading mixed with Hang Seng up by 0.70%, Seoul Composite up by 0.09% and Nikkei 225 down by 0.60%. Back home, the NSE Nifty and BSE Sensex were trading down their psychological 6,050 and 20,500 levels respectively. The market breadth on BSE was negative, out of 2,065 stocks traded, 834 stocks advanced, while 1,084 stocks declined on the BSE. 

The BSE Sensex is currently trading at 20,387.58 down by 37.44 points or 0.18% after trading in a range of 20,482.67 and 20,367.80. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.08%, while Small cap index down by 0.20%.

The gaining sectoral indices on the BSE were Auto up by 0.54%, FMCG up by 0.37%, Consumer Durables up by 0.31% and Oil and Gas up by 0.10%. While, Power down by 0.73%, Realty down by 0.65%, Capital Goods down by 0.65%, Healthcare down by 0.49% and Bankex down by 0.45% were losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.70%, ONGC up by 1.19%, Dr Reddy’s Lab up by 1.02%, Coal India up by 0.89% and ITC up by 0.71%. On the flip side, Bharti Airtel down by 2.20%, BHEL down by 2.06%, SSLT down by 1.53%, Sun Pharma down by 1.16%  and SBI down by 0.96%.

Meanwhile, in a big sign of relief to the foreign banks desirous of converting their branches into wholly owned subsidiaries in India, the Reserve Bank of India (RBI) has notified that conversion of existing foreign bank branches into wholly owned subsidiaries in India will neither attract any capital gains tax nor stamp duty.

The foreign banks were confused over the incidence of tax if they convert braches to wholly owned subsidiaries and sought queries from the central bank regarding the issue. Earlier, this month, the RBI has said that foreign banks, which do not provide adequate disclosures and having complex structures would have to operate in India only through wholly-owned subsidiaries (WoS) in order to regulate and avoid 2008-like crisis. The initial minimum paid-up equity capital or net worth for wholly owned subsidiaries should be Rs 500 crore it added. However, it allowed the foreign banks operating in India before August 2010 to continue their operations in branch model.

The recent RBI guidelines were issued on the back of 2008 global financial crisis, which has emerged due to the growing complexity and inter-connectedness of financial institutions. The central bank has also allowed foreign banks to list their subsidiaries in the local stock exchanges. At present, foreign banks have presence in India only through branches. There are around 43 foreign banks operating in India with a network of 333 branches as of March 2013. gas. The recent Iran nuclear deal will help the country a lot as India’s energy demand is expected to more than double by 2035.

The CNX Nifty is currently trading at 6,043.25 down by 15.25 points or 0.26% after trading in a range of 6,074 and 6,036.60. There were 12 stocks advancing against 38 declining on the index.

The top gainers of the Nifty were Tata Motors up by 1.59%, ONGC up by 1.24%, Coal India up by 1.06%, BPCL up by 0.85% and Dr Reddy’s Lab up by 0.76%. On the flip side, JP Associates down by 2.84%, BHEL down by 2.10%, Bharti Airtel down by 2.03%, Power Grid down by 1.86% and Ranbaxy down by 1.72% were the major losers on the index.

The Asian equity indices were trading mixed; Shanghai Composite up by 0.70%, Jakarta Composite up by 0.03% Taiwan Weighted up by 0.58%, Hang Seng up by 0.70% and Seoul Composite up by 0.09%. While, Nikkei 225 down by 0.60%, Straits Times down by 0.11% and KLSE Composite down by 0.12%